Pound Poised For A Rally?

The pound climbed against the dollar in early trade Tuesday, breaking a seven-day losing run, on speculation rising stock markets will increase demand for the British currency.

The pound also gained versus the euro. The FTSE 100 Index is expected to open steadier after Asian stocks advanced in late trade. Japan's Nikkei index staged a late rally on Tuesday to close up 6.4%, having earlier fallen below the 7,000 mark for the first time in 26 years.

The pound was steady in early trade at $1.5528. Against the euro, the currency strengthened to 80.40 pence. It fell to a record low of 81.96 pence per euro on Oct. 24.

Britain's currency may be poised for a rebound versus the dollar, according to the relative-strength index, a technical indicator some traders use to forecast price direction. The 14-day RSI on the currency was at 18.7, below the 30 threshold that may signal a recovery.